Fulcrum Point


DEFINITION of 'Fulcrum Point'

The turning point in which a security or the economy in general makes a major change in direction. A fulcrum point can be very profitable for investors who are able to identify that a sharp price move is about to take place. For example, after the U.S. equity markets plunged in late 2008, they recovered sharply in early 2009.

BREAKING DOWN 'Fulcrum Point'

It is very difficult to predict or identify a fulcrum point contemporaneously, but the promise of very high returns keeps many investors looking for them. Unfortunately, these movements are so rare that few succeed in both predicting that a movement should occur and in timing the movement correctly. Often, what may seem initially to be a major sharp reversal may instead turn out to be just a minor movement before the major trend resumes.

  1. Point & Figure Chart

    A chart that plots day-to-day price movements without taking ...
  2. Reversal

    A change in the direction of a price trend. On a price chart, ...
  3. Bottom

    The lowest point or price reached by a financial security, commodity, ...
  4. Inflection Point

    An event that results in a significant change in the progress ...
  5. Asset

    1. A resource with economic value that an individual, corporation ...
  6. Payer

    An entity that makes a payment to another. While the term payer ...
Related Articles
  1. Insurance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  2. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  3. Economics

    What's Economic Capital?

    While regulatory and economic capital use some of the same measurements of risk to determine how much capital a firm should hold in reserve, economic capital uses more realistic measures.
  4. Economics

    What is Economic Rent?

    Economic rent typically occurs when a product, service or property is in short supply, but demand is high.
  5. Economics

    Oil Is Cheaper Than Bread In Venezuela...The Country Is In Chaos

    Venezuela is floundering, and the story has more to do with just the falling price of oil.
  6. Economics

    Understanding Production Efficiency

    Production efficiency is the point at which an economy cannot increase output of a good or service without lowering the production of another product.
  7. Economics

    What Does a Central Bank Do?

    A central bank oversees a nation’s monetary system.
  8. Economics

    5 Steps of a Bubble

    In the financial sense, a bubble refers to a situation where the price of an asset far exceeds its fundamental value.
  9. Investing Basics

    Explaining Payment-In-Kind

    With respect to financial instruments, PIK means payments made to the holder of a financial instrument that is something other than cash.
  10. Economics

    Are We in Bubble Territory?

    Are we in bubble territory? If so, why? (or Why Not?)
  1. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  2. Is Mexico an emerging market economy?

    Mexico meets all the criteria of an emerging market economy. The country's gross domestic product, or GDP, per capita beats ... Read Full Answer >>
  3. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>
  4. Is Brazil a developed country?

    Brazil is not a developed country. Though it has the largest economy in South America or Central America, Brazil is still ... Read Full Answer >>
  5. What is the difference between marginal utility and marginal value?

    Depending on the context, marginal utility and marginal value can describe the same thing. The key word for each is "marginal," ... Read Full Answer >>
  6. In economics, what is an index number?

    Economists often make comparisons between sets of data across time. For example, a macroeconomist might want to measure changes ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!